Sanctions for misconduct in a lawsuit are, actually, rare. It takes some doing to get sanctioned.

Here are two Federal Court cases where failures to attend mediation incur the sanctions wrath of the courts. Sanctions in the first case total $41,712.83, while sanctions in the second case are only $1,357.46. The forty thousand dollars difference in the two is well deserved—as demonstrated below.

FIRST CASE – SANCTIONS AMOUNT = $41,712.83

The case is Dietmar Dude v. Congress Plaza,L.L.C., et al., [Fn. 1].

A Recalcitrant Plaintiff

The Court describes the parties as having “an extensive litigation history . . . going back well over ten years” and that the present case is “unnecessarily acrimonious” and “contentious.”

The Plaintiff did his part in all this.

–Refusal to be deposed

Defendants sought “for years” and “repeatedly” to take Plaintiff’s deposition in various lawsuits, “all to no avail.” In the present case, the Court ordered Plaintiff to “appear personally” for a deposition on a specific date. A long story short: after multiple delays and hearings, the deposition did not occur.

–Refusal to appear at mediation

The Court referred the case to mediation and ordered all parties to be physically present. Plaintiff then asked to be excused from attending the mediation on the grounds that:

Plaintiff “has little knowledge of the facts of this case or the circumstances that give rise to it”;
Plaintiff’s niece and brother would be present so that “Plaintiffs presence was not necessary”; and
Plaintiff’s cardiologist advised that significant travel “may trigger the potentially life threatening cardiac arrhythmias he documented in the past.”

The Court described such grounds as “dubious” and denied the request to be excused. Nevertheless, Plaintiff failed to attend the mediation.

Sanctions Motion

So, Defendants filed a Motion for Sanctions. The Court held an evidentiary hearing and granted the Motion.

–Findings

The Court found Plaintiff’s written evidence from his doctors about health issues to be:

Plaintiff testified, for example, that he drafted one doctor’s declaration, who simply agreed to sign it. Another doctor’s testimony about travel limitations “is contradicted” by evidence of Plaintiff’s actual travel activity.

Additionally, the Court found:

Plaintiff “is very clearly playing games with the Court and with Defendants”; and
Plaintiff’s “excuses for failing to appear” are “a farce to avoid his deposition.”

–Authority

For authority to grant sanctions, the Court cites Fed.R.Civ.P. 16(f) & 37(b). It also cites the Court’s “inherent power” to “achieve the orderly and expeditious disposition of cases,” which allows sanctions for “willful misconduct” or “bad faith” or for acting “vexatiously, wantonly, or for oppressive reasons.”

Sanctions Rulings

The Court ruled:

1. “an award of attorney’s fees and costs is appropriate because Plaintiff “blatantly failed to comply with four Court Orders, failed to attend his mediation, refused to sit for his deposition, and failed to prove that he is too ill to travel”;

2. “Plaintiffs efforts to avoid his deposition and mediation are a charade designed to frustrate Defendants”;

3. “Plaintiff has acted in bad faith” and has “wasted the time of this Court and of Defendants’ counsel with his dilatory and improper conduct”;

4. “Plaintiff filed this case, which includes allegations of fraud against members of the Florida Bar, yet is refusing to comply with his basic duties and obligations as a plaintiff”; and

5. Plaintiff’s behavior “will not be tolerated by this Court”;

As to Plaintiff’s counsel, the Court declared its dissatisfaction with his conduct but did not sanction him. That’s because Plaintiff’s counsel:

tried to encourage his client to comply with the Court’s Orders and to come to this district as required;
testified that he could control his client and that Plaintiff ignores his advice;
attempted to obtain better medical evidence but has been unable to do so; and
is guilty only of negligence, not willful misconduct.

Sanctions Amount

The Court awarded sanctions against Plaintiff for defendants’ fees and costs totaling $41,712.83.

SECOND CASE – SANCTIONS AMOUNT = $1,357.46

The second case is Michael Bates v. Fired Up Holding Company, Inc., et al [Fn. 2], in which one party appeared pro se.

Background

On April 5, 2018, the Court ordered the parties into mediation, requiring each party to have “at least one person with final settlement authority” attend the mediation “in person.”

–Inadequate communications

After scheduling the mediation, the pro se party went incommunicado:

–mail from the Court began to return as undeliverable, other mailings came back as “vacant unable to forward,” and local rules for address updating were ignored.

At a pre-mediation hearing, other parties and the mediator indicated that the pro se party had “been in touch” with them—and they informed him of his required attendance. Two points raised in that hearing are:

Plaintiff volunteered to pay the pro se party’s portion of the mediation fee; and
The pro se party had contacted the Courtroom Deputy with questions about difficulties in attending the mediation and was directed to contact attorneys for the other parties and/or file a motion.

After the hearing, the Court called and left voice mail messages at two phone numbers the pro se party had provided, informing him of the mediation and his attendance obligation. A woman who received one of those voice mail messages called back, declaring that she did not know the pro se party and was not associated with him.

–Failure to attend and court action

The pro se party did not appear at the mediation. So, the Court ordered him to appear in person to show cause why sanctions should not be imposed.

The pro se party filed a written response:

citing “indigency” and “lack of knowledge of court procedure” as excuses for non-attendance;
claiming to have tried contacting both the Court and counsel for plaintiffs without receiving a response; and
asking to attend all hearings by telephone.

The Court denied the telephone attendance request and ordered him to provide a current mailing address or register as an ECF filer.

The pro se party appeared at the show cause hearing. He apologized for non-appearance at the mediation and gave the same excuses: lack of funds and lack of knowledge.

Court Findings

The Court described the pro se party’s non-appearance at mediation as unjustified and sanctionable.

–Authority for sanctions

The Court identified the following authorities for sanctions: Fed.R.Civ.P. 16(f) and “inherent authority” of a court to manage its own affairs “to achieve the orderly and expeditious disposition of cases.”

Inherent authority, the Court said, must be “exercised with restraint and discretion” to “preserve the authority of the court” and must employ only “the least possible power adequate to the purpose to be achieved”:

–“In other words, the sanction must ‘be tailored to fit the particular wrong.’” (Italics are added for emphasis.)

–The sanctions

Regarding sanctions against the pro se party, the court found:

failing to appear at mediation is sanctionable conduct;
each party paid $1,357.46 toward the mediator’s fee—except for the pro se party; and
Plaintiff paid the pro se party’s share of the mediator’s fee.

Therefore, the pro se party is ordered to reimburse $1,357.46 to plaintiff for the mediator’s fee.

CONCLUSION

Sanctions for misconduct in a lawsuit are a rare thing. The two recent cases discussed above demonstrate, (i) the types of conduct that get sanctioned, and (ii) how the sanctions are tailored to fit the wrong.

Sanctions of $41,712.83 in the first case reflect a persistent misbehavior over long periods of time, while sanctions of $1,357.46 in the second case reflect a lesser wrong in a limited series of events.
——————-

Footnote 1: The sanctions rulings in Dude v. Congress Plaza appear at Docket 241 (issued July 16, 2018) and at Docket 253 (issued August 13, 2018), Case No. 17-80522 in U.S. District Court for the Southern District of Florida.Footnote 2: The sanctions rulings in Bates v. Fired Up appear at Docket 85 (issued August 15, 2018) and Docket 86 (issued August 30, 2018), Case No. 17-cv-174 in the U.S. District Court for Northern District of Texas.

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My name is Donald L. Swanson (please call me “Don”). I’m an attorney in Omaha, Nebraska, and am a shareholder in the law firm of Koley Jessen P.C., L.L.O. I’ve been practicing business bankruptcy law for more than three decades and represent all types of bankruptcy constituencies, including debtors, creditors, committees, trustees, and § 363 purchasers.
I have extensive mediation experience in both bankruptcy and non-bankruptcy courts. Moreover, I have a decades-long background in resolving multi-party disputes while representing committees and trustees.
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